Congress has until March 31 to pass Medicare SGR fix

By AAFP News Staff

As physicians rang in the new year, they had more reason than ever to hope for the repeal of the dysfunctional sustainable growth rate, or SGR, formula for Medicare payment. Congress is considering a bipartisan, bicameral solution that would avert future double digit rate cuts for Medicare fees and provide incentives for physicians to shift toward a value-based payment model. The House Committee on Ways and Means and the Senate Committee on Finance released an SGR repeal proposal in early November, and the two committees have since met to revise their respective bills.

Although the original proposal called for a 10-year freeze on Medicare physician payments, the bicameral agreement currently on the table would provide a 0.5 percent increase for the next five years. Many of the other details, however, remain the same as have been reported for the past several weeks. For example, the bills, called the Medicare Patient Access and Quality Improvement Act in the House and the SGR Repeal and Medicare Beneficiary Access Improvement Act in the Senate, would:

• repeal the SGR;
• provide funding to shift emphasis toward new payment models that focus on quality of care rather than fee-for-service;
• provide $125 million to help small physician practices transform to payment models based on the quality of care;
• consolidate existing quality improvement programs, such as meaningful use, the physician quality reporting system and the value-based modifier, into a single Value-Based Performance Payment program that would reward high performing practices and that also would decrease penalties assessed on physicians who do not participate in quality programs;
• create a Medicare payment for complex chronic care services, which also will compensate physicians for services provided remotely; and
• create a process to identify misvalued services and redistribute savings on those services within the physician fee schedule.

The bills need to be reconciled, but it is expected that they will be debated in the full House and Senate early this year.

In the meantime, Congress passed a budget resolution before adjourning for the holiday season that includes the three-month payment patch to the SGR, putting off a 20.1 percent cut and instead establishing a temporary update in payment of 0.5 percent until March 31.

“The revised H.R. 2810 (SGR repeal bill) lays the groundwork for significant reforms that encourage new models of care, such as the patient-centered medical home, simplifies and reduces the administrative burden on physicians, and gives CMS additional tools to address misvalued physician services,” said AAFP President Reid Blackwelder, M.D., of Kingsport, Tenn., in a statement from the Academy. “Importantly,” he added, “the bill provides financial support to practices as they transition away from the traditional, procedures-focused model of care that responds to illness and move toward a comprehensive, coordinated and outcomes-based model that strives to prevent health problems and improve patients’ health.”

Even if the SGR is repealed, however, Blackwelder points out that primary care physicians face cuts from other sources, including the proposal in the Patient Protection and Affordable Care Act that brings Medicaid payments up to at least Medicare levels in 2013 and 2014. This program is set to end in 2014, “creating significant challenges for our members who have accepted additional Medicaid patients into their practices,” Blackwelder said. “As Medicaid pays on average only two-thirds of Medicare, this will hit primary care physicians especially hard.”

The AAFP is actively working on encouraging Congress to extend the program for at least an additional two years to truly give it a chance to work, as state-based delays in payment have led to many physicians not receiving the enhanced payment.

According to Blackwelder, “Much needs to be done to continue to move payment reform to a system that values primary care and pays for value, not volume.” He noted that these are issues the AAFP will continue to work on during 2014 and beyond. In addition, the Academy will be watching as regulations promulgated by the SGR bill are implemented to ensure there are no unintended consequences for family physicians.

Source: The majority of this article was written by AAFP News Staff, AAFP News Now, Dec. 18, 2013. ©American Academy of Family Physicians 2013.